The United States is debating whether to remove some existing tariffs on Chinese goods, the Financial Times reported, a possible sign of an easing in tensions as both countries aim to seal the first phase of a trade deal this month.
White House officials are considering scaling back tariffs on $112bn of Chinese imports, including those on clothing and appliances, that were introduced at a 15 percent rate on September 1, five people familiar with the matter told the newspaper.
The report preceded several positive developments on Tuesday surrounding the US-China trade war, which boosted Asian markets after Wall Street hit fresh record highs the day before.
Separately, Chinese officials reportedly said they were studying locations in the US where President Xi Jinping would be willing to meet with his counterpart, US President Donald Trump, to sign the first phase of the trade deal.
The officials are open to the Chinese president travelling to the US even if it is not part of a state visit, people familiar with the matter told the Bloomberg news agency.
US Commerce Secretary Wilbur Ross said that good progress was being made towards completing the first phase of the trade agreement, which could pave the way for a more robust deal.
“We’re hopeful that phase one will be the precursor of a much more robust set of agreements,” Ross said during a call with reporters during a visit to Thailand for regional meetings.
On Tuesday, Xi reiterated the need for countries to work together to build a more open world economy in a speech at the China International Import Expo.
“We need to stand firm against protectionism … we need to continually bring down trade barriers,” he said.
The president also said China would step up intellectual property protection, a thorn in its trade relations with the US by improving its legal framework and step up law enforcement.
China would continue giving foreigners greater access to its markets, lowering tariffs and importing more high-quality goods and services, Xi said.
Investors cheered the positive news on trade with stock markets in Asia climbing on Tuesday morning.
Optimism that the US economy is poised for solid, consumer-driven growth also drove markets higher.
Japan’s Nikkei rose 1.42 percent to a one-year high after a market holiday on Monday, while Hong Kong’s Hang Seng posted a 1.65-percent jump, before losing some of those gains on weak business activity data. The territory’s Purchasing Managers’ Index slumped to a 21-year low in October.
MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed in early trade after hitting a four-month high the previous day.
US S&P 500 futures gained a further 0.2 percent in Asia, suggesting that Wall Street is poised for another rally after the S&P 500, Dow Jones and Nasdaq all hit record highs in the previous trading session.
Domestic politics in the US may be a factor in the latest trade developments, according to at least one analyst.
“Trump might be looking to boost his political position ahead of the 2020 US presidential election. The last thing he wants is a lower stock market,” Stephen Innes, Asia Pacific market strategist at AxiTrader told Al Jazeera.
The US president is therefore likely to continue to try to boost share prices with positive rhetoric on the US-China trade deal, Innes said.
In Europe, shares rallied more than one percent on Monday, with many reaching their highest level since January 2018.
Trade optimism kept the Chinese yuan near its highest levels since mid-August, with the offshore yuan at 7.0246 per dollar.
Xi amplified China’s desire to boost multilateral and bilateral trade deals, saying that it hopes a 16-nation Asian trade pact can be signed “as early as possible” and that China “will be happy to enter into more free trade agreements” with other countries.
In an apparent nod to US criticism of the World Trade Organization, he said that China “supports necessary reforms to the WTO, so that the organisation can play a bigger role in promoting openness and development”.
Xi added that China would host an informal WTO ministerial meeting on Tuesday afternoon in Shanghai, where leaders including French President Emmanuel Macron have gathered.
The speech suggests China is looking to insulate themselves from the negative effects of global trade tensions by boosting their domestic economy, Innes said.
“That’s why it’s opening up its capital markets and looking to bolster trade regionally,” he said.
It puts China in a stronger position to negotiate on the removal of tariffs by the US.
According to people familiar with the matter, China is pushing the US to remove more tariffs as part of the first phase of the trade deal, Reuters reported.
The deal is widely expected to include a US pledge to scrap $156bn worth of tariffs on Chinese goods including mobile phones, computers and toys.
“Xi is not going to roll over and give Trump whatever he wants,” Innes said.